Greetings from Capitol Hill, Juneau,

It has been an interesting session so far. The big issue is the budget that Governor Murkowski proposed. While I applaud the program-cutting approach, which I have advocated for some time, I think some of the revenue-raising issues are troublesome. I think most Alaskans who have not been living in caves, realize by now that we are fast approaching the day when the money to fund daily operations of government is running out. We have been, for over a decade, supporting government revenue shortfalls with a savings account called the Constitutional Budget Reserve (CBR). Depending on whose figures you believe and the price of oil, the CBR is slated to run empty in two to five years. Regardless of whose figures you believe, all agree it is a finite resource. We must act now to avoid a major disruption to the economy of our state in the near future. The way I see it, the best way to alleviate this problem is multifaceted.

First and foremost, we must reverse the policies of discouraging new business to invest here. We do this by taking several actions.

• Remove the cumbersome regulatory barriers to development in Alaska. It takes four times longer to permit an onshore oil well in Alaska than an offshore oil well in the Gulf of Mexico. Like it or not, oil is the backbone of our states economy.
• Provide an investment tax credit for new capital investment in developing our resources. This will help mitigate the tax burden on exploration costs before they produce anything. Once the development is producing, the tax break goes away. The long-term revenues generated will more than offset the short-term corporate tax loss.
• Make serious reductions to the size and cost of government. Major companies are discouraged in investing here when fiscal instability is the rule of the day. They are rightfully fearful that the people of the state will look to their deep pockets to fill budget gaps rather than institute new taxes on the public. Capital investment in exploration competes worldwide for those dollars.

The legislature just had a visit from the British Columbia Minister of State for Intergovernmental Relations, Greg Halsey-Brandt. I heard that they made major cuts to their permitting regulations and their budget. I asked him how much they cut their budget this year. He reported to me that they had cut 35%. They have also eliminated about one third of their regulations. I asked this question because of reports of renewed investment by resource developers in B.C. The lesson here is that excessive regulatory environments compete with streamlined regulatory environments for capital investment by multi-national resource development companies. Interesting similarities?

Is It Time For New Taxes?

I believe the last thing on the table should be new revenue sources. I think most Alaskans appreciate that we have not paid state sales tax, state income tax and have the lowest gas tax in the nation. We have come to expect state services for nothing. We receive a permanent fund dividend yearly that represents our share of the collectively-owned oil resources in our state.

There are no major sources of revenue replacement in the form of oil development on the immediate horizon. It will take time for any new development to come on line and mitigate the budget shortfall. I can say that I am willing to step up to the plate and pay my share of taxes, if I felt the state has done all it could to reduce the budget. I feel even stronger that the state has not done the tough job of prioritizing state spending. With over five hundred new programs since big oil revenues, there has not been a deep enough discussion of what needs to go away.

The worst penalty we can all pay is the loss of value in the biggest investment in most people's lives, our homes. If we fail to address our looming budget crisis, all home owners may pay a huge price in the devaluation of their homes. Ask anyone who was here in the mid-eighties. Ladies and gentlemen, as a conservative Republican and an outspoken advocate of smaller government, I can tell you that in my best judgment, without fundamental changes, we are on a collision course with fiscal disaster.

The last Administration wanted your permanent fund and state income taxes, yet proposed hundreds of millions in increases to the budget each year. Governor Murkowski recognizes the need for less government and streamlined regulations. I think he understands that we are "on a collision course with Bligh Reef" with our finances, thus his request for consideration of new "user fees." However, I believe the cuts in spending do not go far enough to instill a confidence with Alaskans that it is now time to step up to the plate and pay more of our share.

Longevity Bonus Program

Many of you have written to me or called expressing your views on Governor Murkowski's 2004 Fiscal Budget and particularly, how it affects the Longevity Bonus Program.

The Governor identified that the state's primary mission was to build a robust, growing economy, and to generate sufficient state revenue to fund quality education, public safety, transportation, health care services, etc. Governor Murkowski started the process of reorganizing departments the day he took office in an effort to combine or eliminate programs.

The Longevity Bonus Program is one that the Murkowski team considered to eliminate to achieve his goals. I am very aware that this issue significantly affects several of our senior citizens who depend on that bonus to live on. As many of you know, I have supported the continuation of the Longevity Bonus Program and I will continue to do so. It may be possible to make some changes to the Governor's bill through the legislative process that will address the concerns of those seniors that truly depend on it. Most seniors at our town meetings felt a means testing would be a fair way to continue the program.

Energy Council

I just returned from an Energy Council Conference in Washington DC. I was elected Vice-Chair at that meeting and will succeed the chairman in September. Please see the attached press release.

Survivor Party

On March 16, my family and I celebrated the one-year anniversary of my heart attack. We had a whole lot more fun, compared to what we were doing this time last year. We were blessed to have over one hundred friends and supporters in attendance. It was a potluck and the food and fellowship were wonderful. Adele Morgan entertained the group with her wonderful singing and we all had a good time. I am privileged to represent some of the greatest people in the world and many of them were in attendance.

Town Meetings

Representative Bill Stoltze and I had a town meeting at Lazy Mountain Bible Church in Palmer on Saturday, March 15, for the constituents in the Lazy Mountain, Butte, and Knik River Road area. It was the first time that a town meeting was held on the east side of the Matanuska River. It was well attended by a broad range of people with many new faces. The issues ranged from wild land fire escape and access issues, construction schedule of the Old Glenn Highway, longevity bonus, proposed cuts to assisted living and a number of other topics.

Another town meeting later that day was held at Chugiak Senior Center. The entire Chugiak-Eagle River legislative delegation was in attendance. The meeting was predominantly attended by seniors interested in the longevity bonus issue. When asked for a show of hands of who would support a needs test for eligibility of the longevity bonus, all raised their hands but one.

I held a town meeting at the Upper Susitna Senior Center in Talkeetna on Saturday, March 1 for the Trapper Creek/Y/Talkeetna area residents. Representative Beverly Masek attended by telephone. I was told that this was the first time a legislator had held a town meeting there. There were about 30 people in attendance. The issues ranged from the Upper Susitna school concerns, including the Trapper Creek School cuts, to discussions about rural power lines extensions, health care issues, roads, and over-population of wolves.

The next town meeting is scheduled for Saturday, April 5, in Big Lake, at the Bud Beech Public Safety Building. A public notice has already been sent out with more details.

Personal and Co-sponsored Legislation

Prime-Sponsor Of The Following Bills

Co-Sponsor Of The Following Bills

Links

http://www.ktoo.org/gavel/ - the home page for Gavel to Gavel
http://www.state.ak.us/ -- the home page for the State of Alaska
http://www.legis.state.ak.us/ -- up-to-date state legislation information

District Delegation Contacts

Due to 2002 redistricting, here are the legislators representing Mat-Su Valley and surrounding districts:

Dist F: Senator Gene Therriault
North Pole/Valdez
Dist 11: Representative John Coghill
Dist 12: Representative John Harris

Dist G: Senator Lyda Green
Greater Wasilla and Palmer
Dist 13: Representative Carl Gatto
Dist 14: Representative Vic Kohring

Dist H: Senator Scott Ogan
Rural Mat-Su/Palmer
Dist 15: Representative Beverly Masek
Dist 16: Representative Bill Stoltze

Dist I: Senator Fred Dyson
Eagle River/Anchorage
Dist 17: Representative Pete Kott
Dist 18: Representative Nancy Dahlstrom

Keep in touch. I will strive to do the same.

Senator Scott Ogan
District H
Twenty-third Alaska State Legislature

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